Dec 20 (Reuters) - Michigan Governor Rick Snyder on Thursday signed legislation that will phase out a tax levied on businesses’ manufacturing equipment that raises $470 million a year for local governments and schools.
Under the law signed by Snyder, a Republican, the personal property tax on tools and equipment will gradually be reduced starting in 2016 and completely eliminated in 2023.
A coalition of Michigan city, county and school groups called “Replace Don’t Erase,” has said the tax will not be fully replaced under the legislation.
Subject to voter approval in August 2014, Michigan’s use tax will be tapped to reimburse local governments for services that were funded with personal property tax revenue, the governor’s office said in a statement.
It said that police, fire, jail and ambulance services will be fully reimbursed. Other services will be funded at a minimum of 80 percent and school districts and their debt will be held harmless.